3Com details home networking strategy

3Com forms a home networking unit to help consumers interconnect PCs, TVs, printers, and other household electronic devices.

January 2, 20024:43 PM PST

A week after rival Cisco Systems outlined its home networking strategy, 3Com formed a new home networking unit to help consumers interconnect their PCs, televisions, printers, and other household electronic devices.

The Home Networking Business Unit is intended to help 3Com bind together its different technologies--modems, personal digital assistants (PDAs), and networking equipment--and build a cohesive product line. The idea is to make it easy for the mass market consumer to network their homes, said Roy Johnson, the new unit's vice president and general manager.

"We've been investing in home networking for more than a year now and
actively developing products. We decided a few months ago we needed to pull together a much more focused organizational structure," Johnson said.

Studies have shown that the market potential for home networking is huge. A
recent Yankee Groupanalysis found that 30 percent of the U.S. households that own multiple PCs want to tie all their electrical devices together.

According to Dataquest analyst DavidPaul Doyle, the goal of home networking is to unite all types of devices, including stereos, VCRs, and alarm systems. All kinds of manufacturers--from entertainment and home security to PC and networking companies--have latched onto the home networking market because it allows them create a whole new
set of consumer products, he said.

A separate home networking unit is a smart move for 3Com, Doyle said. The new unit will be able to serve as an umbrella organization that oversees and bridges the home networking strategies of its different divisions, such as networking, wireless and Palm organizers, he observed.

"This was a necessary step for 3Com to better focus and develop the cohesiveness they need to truly tackle the entire home networking market and not just different fragments," Doyle said.

In terms of products, 3Com, Intel, and Diamond Multimedia will emerge as
leaders in the home networking market, Doyle believes, with Cisco a potential major player.

The two networking rivals, 3Com and Cisco, are not competing head-to-head in the home networking market, Doyle added. 3Com is making such products as cable and DSL
modems and network interface cards, while Cisco is licensing its software
to partners.

Cisco's licensees are including the networking giant's software in their cable modems and other products, including "plug and play" local area networks for the home user.

"Cisco is partnering with 30 companies to have a whole set of products they
want to put their software into, but they're not manufacturing actual boxes," Dataquest's Doyle said. "3Com makes modems and consumer NICs [network interface cards]."

3Com's Johnson expects that home networking will start to take off in the second half of 1999 as high-speed Internet access--through cable and DSL--becomes more prevalent. By then, he said, 3Com will launch a product that allows users to connect their computers together by installing a network interface card to their home PCs and plugging a line into their telephone jacks.